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Small Dollar Loans: The Impact

  • Military Lending Act (2006). Congress took action to place a 36% annual interest rate cap on small consumer loans made to military service members and their families. In 2015, the U.S. Department of Defense enhanced these protections to effectively cover harmful forms of consumer credit and to close loopholes.
  • States act to stop payday loan abuses (2008). Following North Carolina's enactment of its rate caps in 2001, other states have done so as well. Since 2007, Arkansas, Arizona, Washington DC, Montana, New Hampshire, Ohio, Oregon, took steps to end 400% interest rates on payday loans. Several other states, such as Washington, Colorado, Virginia, and others have taken steps to eliminate some of the worst payday loan abuse. Over the last decade, CRL has worked policymakers and stakeholders in over a two dozen states to address payday loan abuses, both to help reign it in as well as prevent the expansion of these products.
  • End of bank payday loans (2014). We published the first research exposing that payday loans from banks were just like other payday loans (link to Big Bank Payday Loans and Triple Digit Danger), which helped bring about guidelines that led to banks' discontinuation of triple-digit payday loan products.
  • Federal rules, which we expect to address some elements of the debt trap caused by payday lending, are on the horizon.

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EVP; Director of State Policy
Executive Vice President
Senior Policy Counsel